Huawei seeks $1b in first big funding test after US blacklist

Photographer: Krisztian Bocsi/Bloomberg

Huawei Technologies Co. is seeking about $1 billion from a small group of lenders, its first major funding test after getting hit with U.S. curbs that threaten to cut off access to critical suppliers.

The world’s largest provider of networking gear is seeking an offshore loan in either U.S. or Hong Kong dollars, said people familiar with the matter, who asked not to be identified discussing private information. The company is targeting maturities of five and seven years, the people said.

Huawei, one of China’s biggest national champions, has become a central player in the country’s conflicts with the U.S. over trade and key technologies. The Trump administration jolted global investors last week by adding the Shenzhen-based company to a blacklist that could potentially hobble its access to parts and software from American suppliers. Huawei’s dollar-denominated bonds tumbled to three-month lows on the news and one of Asia’s top-performing debt managers offloaded his holdings.

The company’s talks with lenders are still at an early stage and there’s no guarantee a deal will happen. If it does, the loan’s pricing — as well as the identities of the participating banks — could provide further clues on the market’s perception of Huawei’s financial strength. The company had 37 billion yuan ($5.3 billion) of unsecured bank loans as of December, of which 2.8 billion yuan were due in one year or less, according to its 2018 annual report. It had cash and cash equivalents of about 2.6 times total borrowing.

Huawei didn’t immediately reply to a request for comment.

Huawei’s latest fundraising attempt comes about four months after it obtained a 14 billion yuan loan from five Chinese banks. In September, the company raised $1.5 billion offshore from a group of 10 mostly international banks.

On Thursday, Donald Trump described Huawei as “very dangerous” while at the same time saying the company could be part of a trade pact with China. The breadth and duration of the U.S. curbs are still uncertain, Fitch Ratings said in a report on Friday.

Bloomberg

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.